Pension plan critical to fire district merger
Timberline Fire Authority Board determined to succeed
It could cost as much as $110,000 for Timberline Fire Authority (TFA) to merge High Country (HCFPD) and Colorado Sierra Fire (CSFPD) Protection Districts through an election process. That was the amount given in one attorney’s presentation to TFA at a meeting earlier this month. With that in mind, TFA is again considering an alternative path to merger: dissolution of one district with inclusion to the other. Any money saved in the process could be put into the firefighters’ pension fund. The pension fund is one of the hurdles in the merger process, but TFA’s Board of Directors, comprised of three HCFPD Board members (Paul Britton, Roger Durham and John Rittenhouse) and three CSFPD Board members (Gail Maxwell, Chris Schimanskey and Rick Wenzel), are determined to get past it and form one district.
At a special meeting on August 24th, TFA’s Board considered options. They could choose to have as many as three pension plans, keeping the current HCFPD and CSFPD plans plus creating a new TFA plan. That would mean bearing the cost (and headaches) of administering three plans. They prefer to combine the current plans into a single pension plan for everybody. To do that, they must settle the contribution amount needed from the two different districts. HCFPD’s estimated 2009 contribution to their pension fund is $61,318. That pays out to 34 retired members at a monthly rate of $14 per each year of service. CSFPD’s 2009 contribution is estimated at $39,000. Their plan pays out to 9 retired members at a monthly rate of $5 per year of service. They would like to have the pay-outs equal. The Intergovernmental Agreement (IGA), signed by both districts at the beginning of the merger process, calls for a 50/50 split. CSFPD, a much smaller department with a smaller budget can’t contribute at that level and still maintain operations. Schimanskey, speaking for the CSFPD Board, suggested the split be 80/20 proportionate to the districts’ budget ratios. Once the merger is completed, he and several other TFA Board members agreed, the money is all in one pot anyway and all firefighters will be Timberline members. To change the expense ratio, the Boards of both districts will be asked to agree to change the IGA.
TFA Board members need to know how much each pension plan option will cost before making a final decision. To figure that, they must contract with a vendor for an actuarial study which could cost as much as $4,200. TFA’s bank account currently contains $4,100. Per the IGA, TFA’s budget was funded by equal contributions of $2,500 from each district. TFA Board members will ask their district Boards to agree to do the study and to contribute another $2,500 to the TFA budget.
TFA is the entity formed after HCFPD and CSFPD decided to look into merging, a process they began in February 2008. After forming TFA, firefighters from the two districts began working together although, technically, the two districts remain separate entities until a merger is completed. If the merger is done by election, the residents in both districts must approve the merger by vote. If the process is done by dissolution/inclusion, only the residents in the district being dissolved must vote. Should TFA decide to go that route, it is likely that CSFPD would dissolve and be included in HCFPD. Their district is smaller in area and completely surrounded by HCFPD. In addition, to do it in reverse (dissolving HCFPD) would require the voting process in Gilpin and Boulder counties as the district includes both. That would be more costly.
Board members and firefighters from both districts agree that working together has resulted in having more firefighters available to answer calls and quicker response times. They say the bottom line is providing the best service to the taxpayer residents in their districts and that service will only get better once the merger is done. About a year after a merger is accomplished, elections would be held to seat the new Board of Directors who would then take charge of the new singular district.